A Dongfeng Motor Corp. executive said the state-owned Chinese automaker, which is reportedly tied to a potential stake sale of PSA is still weighing down the arguments in favor of the move.
According to sources with knowledge of the negotiations, PSA is mulling equal stake sales to Dongfeng and the French government to get the necessary cash funding needed for the turnaround, as car sales in Europe plunged to a 20-year low in recent years.
“It’s too early to talk about whether we have NDRC’s approval to go ahead with talks,” Zhu Fushou, general manager of Dongfeng Motor, said at an auto forum in Wuhan, China, where the automaker is based. “What matters here is not NDRC’s approval, it is whether the project is reasonable or not.”
Zhu’s comments show that Dongfeng has not been granted the green light by the Chinese government to side with Peugeot. The French government is also monitoring the talks with Dongfeng and is interested in participating in the stake sale if the Chinese automaker decides in favor of the deal, two of the people familiar with the proceedings reported this month. The negotiations are still in their incipient stage and are not expected to be finalized for several weeks, they added, under condition of anonymity.